The State owned Kuwait Airways could be facing a major damaging financial situation after the Kuwaiti government has reportedly refused to cover KD145 million ($490 million) in losses incurred during the past two years.
According to local media, Finance Minister Anas Khalid Al Saleh had demanded the airline shoulder its debts as it prepares to become a listed company, Arabic daily Al Qabas reported.
The airline incurred losses of KD67.6 million in 2013 and KD78 million in 2014, according to sources quoted by the daily.
Kuwait Airways CEO Rasha Al Roumi told Arabian Business last year, the airlines’ losses were $60 million in 2013 hat followed losses of KD80 million in 2011-12, on top of $275 million in losses in 2010-11 and $180 million the year before.
In 2013, the airline received $500 million in compensation from the Iraqi government for damages incurred during the 1990 invasion, and also had $1.5 billion worth of debt accumulated between 2004-2012 taken over by the Kuwaiti government as part of plans to privatise the airline.
There is no public timeline for the privatisation.
The carrier, which is one of the worst performing in the region and had only 14 percent of the local market in 2013, received its first new aircraft in 17 years this week.
Four leased A320s are due to come into service within days. Another eight also are on order while the airline awaits its purchased planes, due closer to 2020.
In an interview last year, Al Roumi told Arabian Business the upgraded fleet would save tens of millions in maintenance bills each year and help the airline get back into the black. It has recorded losses for all but one year since the early 1990s
According to local media, Finance Minister Anas Khalid Al Saleh had demanded the airline shoulder its debts as it prepares to become a listed company, Arabic daily Al Qabas reported.
The airline incurred losses of KD67.6 million in 2013 and KD78 million in 2014, according to sources quoted by the daily.
Kuwait Airways CEO Rasha Al Roumi told Arabian Business last year, the airlines’ losses were $60 million in 2013 hat followed losses of KD80 million in 2011-12, on top of $275 million in losses in 2010-11 and $180 million the year before.
In 2013, the airline received $500 million in compensation from the Iraqi government for damages incurred during the 1990 invasion, and also had $1.5 billion worth of debt accumulated between 2004-2012 taken over by the Kuwaiti government as part of plans to privatise the airline.
There is no public timeline for the privatisation.
The carrier, which is one of the worst performing in the region and had only 14 percent of the local market in 2013, received its first new aircraft in 17 years this week.
In an interview last year, Al Roumi told Arabian Business the upgraded fleet would save tens of millions in maintenance bills each year and help the airline get back into the black. It has recorded losses for all but one year since the early 1990s